Stuart v. Potter, Choate, & Prentice and Others [1911] ScotLR 657 (16 March 1911)

Stuart v. Potter, Choate, & Prentice and Others [1911] ScotLR 657 (16 March 1911)

The letter of 15 February 1907 did not itself constitute the contract but was evidence of a pre-existing obligation by the defenders to hold the 13,000 dollar interest for the insurance company, substituting them for Fisher. The letter was valid as a commercial document (in re mercatoria) under Scots law, and the defenders were bound to deliver the bonds or account for them. The averments of foreign law were insufficient, and even on the evidence, New York law did not materially differ from Scots law in this context. The defenders were personally barred from denying the obligation, as the insurance company lost the chance to recover from Fisher by relying on the letter.

Citation
[1911] ScotLR 657
Parties
Pursuer (applicant): Horatius Stuart, S.S.C., Edinburgh, as assignee of the Scottish Metropolitan Life Assurance Company, Limited, Edinburgh; Defender (respondent): Potter, Choate, & Prentice, bankers and stockbrokers, New York; Defender (respondent): W. D. Fisher, sometime stockbroker in Dundee and London; Defender (respondent): E. L. Bennett, C.A., London, as trustee in bankruptcy of W. D. Fisher
Jurisdiction
Scotland
Judgment Date
16 March 1911
Procedural Posture
Civil (contract/trust) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Second Division
Outcome
Appeal allowed; interlocutor of Lord Ordinary recalled; decree for pursuer granted.
Legal Topics
Constitution of Contract, Letter as Evidence of Contract, Foreign Law—proof and Relevancy, Personal Bar (estoppel), Loss of Chance, Commercial Documents (in Re Mercatoria)
Contract Law Trust Law Private International Law Constitution of Contract Letter as Evidence of Contract Foreign Law—proof and Relevancy Personal Bar (estoppel) Loss of Chance +1 more

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Parties

Horatius Stuart, S.S.C., Edinburgh, as assignee of the Scottish Metropolitan Life Assurance Company, Limited, Edinburgh

Pursuer (applicant)

Potter, Choate, & Prentice, bankers and stockbrokers, New York

Defender (respondent)

W. D. Fisher, sometime stockbroker in Dundee and London

Defender (respondent)

E. L. Bennett, C.A., London, as trustee in bankruptcy of W. D. Fisher

Defender (respondent)

Procedural Posture

Civil (contract/trust) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Second Division

Legal Issues

  1. 1 Does the letter of 15 February 1907 constitute a contract or merely evidence of a pre-existing contract?
  2. 2 Is the letter valid and effectual under Scots law or New York law?
  3. 3 Is the defenders' plea of personal bar (estoppel) available?

Ratio Decidendi

The letter of 15 February 1907 did not itself constitute the contract but was evidence of a pre-existing obligation by the defenders to hold the 13,000 dollar interest for the insurance company, substituting them for Fisher. The letter was valid as a commercial document (in re mercatoria) under Scots law, and the defenders were bound to deliver the bonds or account for them. The averments of foreign law were insufficient, and even on the evidence, New York law did not materially differ from Scots law in this context. The defenders were personally barred from denying the obligation, as the insurance company lost the chance to recover from Fisher by relying on the letter.

Court Disposition

Appeal allowed; interlocutor of Lord Ordinary recalled; decree for pursuer granted.

Orders

  • Defenders ordained to deliver to the pursuer twelve 4% gold bonds of $1,000 each of the Louisville and Nashville Railroad Company (Atlanta, Knoxville and Cincinnati Division), or the equivalent in cash for past due coupons, and to pay £73 16s. sterling with interest at 5% per annum from 13 June 1907 until payment,...